Some of the largest U.S. banks are reportedly working on launching their stablecoins, the “guaranteed” digital currencies that have long been at the center of public debate. This was suggested in July by Reuters, quoting Bank of America CEO Brian Moynihan, his peers at Citibank and JPMorgan (Jane Fraser and Jamie Dimon), and Morgan Stanley CFO Sharon Yeshaya. Their statements seemed quite cautious – “We’re looking both at the landscape, the uses, and the potential uses but, it really is a little early to tell,” Yeshaya said – but were enough to confirm the vivid attention of lending institutions to crypto-assets. Something which is certainly not surprising.
The U.S. is regulating stablecoins
After gaining the open support of Donald Trump, in fact, stablecoins have been recently featured in major regulatory initiatives that can hardly be underestimated. First and foremost the Genius Act, which, after approval last June 16 by the Senate, got the final green light from the House of Representatives a month later.
The text, which passed with two bipartisan votes (68-30 among senators, 308-122 among congressmen), defined stable currencies as “a digital asset that is, or is designed to be, used as a means of payment or settlement where the issuer (i) is obligated to convert, redeem or repurchase the digital asset for a fixed amount of monetary value and (ii) represents (or creates a reasonable expectation) that the digital asset will maintain a stable value relative to the value of a fixed amount of monetary value.” But what does this all mean? And what does it imply legally and financially? Let’s try to explain it.
The goal: to overcome the volatility of crypto
The Genius Act defines digital assets as a “representation of value that is recorded on a cryptographically secured distributed ledger,” i.e., a technology for sharing transactions or verified information among participants in the trades. But this alone, of course, is not enough to define stablecoins, which, as their name suggests, are unique cryptocurrencies since they are “pegged” to another asset that is (usually) tangible.
Stablecoins, in short, arise as a response to the original sin of cryptocurrencies, namely, high volatility.
Unlike bitcoins or similar, in fact, they can rely on safe collaterals such as the U.S. dollar, U.S. government deposits and short-term treasuries or gold, among others. These “guarantees” are available in 1:1 ratio to ensure the convertibility of the “stable” digital currency. And here comes the need to regulate their distribution by defining, for example, which entities are allowed for their issuance. That is, according to the Genius Act, banks, credit unions and non bank financial firms.
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Faster and cheaper payment instruments
The stability of these currencies can boost their use as a means of payment. Their main potential, in other words, does not lie in their speculative margins -which are smaller, by definition, than those offered by more volatile assets – but in their potential diffusion as a commonly accepted transaction instrument. And it is precisely this point, today, that is attracting the attention of banks trying to take a prominent position in the market.
This of course also means anticipating competition from other issuers aim ing to offer consumers new payment instruments with lower costs than traditional banking tools such as cards, online banking etc.
Speaking before the vote in the Senate, Tennessee Republican Senator Bill Hagerty, a leading supporter of the Genius Act, said stablecoins could allow businesses and consumers to settle payments “nearly instantaneously” instead of taking weeks. As “stable” as they are, however, these currencies cannot be said to be risk-free, expecially in the vent of default of their private issuers. In 2023, as S&P Global Ratings – quoted by CBS – recalled, the failure of three of them – Silicon Valley Bank, Signature Bank and Silvergate Bank – eventually resulted in convertibility concerns for two different stablecoins: USDC and DAI.
A fast-growing market
According to Forbes data, as of July 17 2025 there were more than 17,600 different cryptocurrencies in circulation with a total market capitalization approaching $3.9 trillion. Outstanding stablecoins were just 35 with a market value of about $240 bn. The main players are Tether, “with a value meant to mirror the value of the U.S. dollar” and a $160 bn market cap represents more than half the market, and USDC (63 billion), a “fully collateralized US dollar stablecoin” traded against the US national currency in a 1:0.999 ratio. Some stablecoins are pegged to Euro but today they still account for a negligible share of the market with a total capitalization, measured as of last July 17 on the CoinMarketCap website, of just over half a billion.
The numbers, in short, are still small. But the outlook is bright. According to the latest forecast by JPMorgan, which is one of the less optimistic estimates, for instance, the total capitalization of stablecoins could actually double by 2028 reaching half a trillion dollars.
